A new GAO report says that Dodd-Frank, the 2010 law that enormously expands the federal government’s regulatory role in the financial markets, is being implemented at a snail’s pace:

Overall, GAO identified 236 provisions of the act that require regulators to issue rulemakings across nine key areas. As of December 2012, regulators had issued final rules for about 48 percent of these provisions; however, in some cases the dates by which affected entities had to comply with the rules had yet to be reached. Of the remaining provisions, regulators had proposed rules for about 29 percent, and rulemakings had not occurred for about 23 percent.

At first blush, limited government conservatives might cheer the slow growth in regulation. But limited government is only good if it’s for the right reasons; for instance, relying on the current legal (fraud) and market (bankruptcy) framework to police financial bad actors. Here, however, the delays are due to Dodd-Frank’s perpetuation of flawed regulatory methods.

For example, the report lists obstacles such as regulators with overlapping jurisdictions and inconsistent rules, impossible-to-meet statutory deadlines, and lack of consumer confidence in the regulators’ ability to produce fair and reasonable guidelines. To cope with these realities, bureaucrats are opting to miss deadlines in favor of more collaborative rules. But while the benefit may be more buy-in from stakeholders inside and outside the government, the costs are huge to the businessman on the street.

The two biggest casualties are the rule of law and regulatory transparency. The first is undermined because bureaucrats allowed to ignore statutory mandates are bureaucrats allowed to operate outside the law. Think a private business could just decide to miss a deadline because compliance is too hard?

Moreover, part of the difficulty complying comes from the lack of transparency. Businesspeople need certainty in regulations to plan for the future, but that can’t be done when deadlines are waived at the discretion of the regulator. So instead of being able to act on distasteful yet concrete information, businesses are left wondering how to position themselves as the regulatory elites “collaborate.”

In this type of environment, the safest bet is not to take risks like hiring or expanding. With government like this, is it any wonder the job market is so lousy?